Five private security guards working for the American firm Blackwater fired machine guns and grenade launchers against unarmed Iraqi civilians, some who had their hands up, US prosecution lawyers said today.

The five face 14 counts of manslaughter and 20 counts of attempted manslaughter, lawyers announced, following last year's shooting which killed 17 Iraqis.

They are also charged with using a machine gun to commit a crime of violence, a charge that carries a 30-year minimum sentence.

The five guards surrendered today and were due to ask a federal judge for bail.

A sixth guard for the US contractor has admitted in a plea deal to killing at least one Iraqi in the shooting in Baghdad's Nisoor Square.

The killings occurred as the guards attempted to protect a convoy of US diplomats. The bloodshed damaged relations between the Iraqi government and the Bush administration and private security firms were accused of acting trigger-happy, operating with legal impunity.

"The tragic events in Nisoor Square on September 16 of last year were shocking and a violation of basic human rights," the FBI assistant director, Joseph Persichini, said.

The shooting unfolded in a crowded square, where prosecutors say civilians were going about their lives. The heavily armed Blackwater convoy sought to shut down the junction following a car bombing elsewhere in the city.

Witnesses said the contractors opened fire unprovoked. Women and children were among the victims and the shooting left the square littered with blown-out cars.

"At least 34 unarmed Iraqi civilians, including women and children, were killed or injured without justification or provocation by these Blackwater security guards," the national security prosecutor, Pat Rowan, said.

Blackwater, the largest security contractor in Iraq, said insurgents ambushed its guards while the guards responded to a car bombing.

"We think it's pure and simple a case of self-defence," Paul Cassell, a Utah attorney on the defence team. "Tragically people did die."

The accused guards are: Donald Ball, a former Marine from West Valley City, Utah; Dustin Heard, a former Marine from Knoxville, Tennessee; Evan Liberty, a former Marine from Rochester, New Hampshire; Nick Slatten, a former Army sergeant from Sparta, Tennessee; and Paul Slough, an Army veteran from Keller, Texas.

The sixth guard was identified as Jeremy Ridgeway, who is from California.

The guards' lawyers were challenging the US justice department's authority to prosecute the case. The law is murky on whether contractors can be charged in American courts for alleged crimes committed overseas.

The guards face the prospect of 30-year mandatory prison terms under the anti-machine gun law passed during the height of the crack cocaine epidemic.

The shooting strained relations between the US and Iraqi governments. Iraqi ministers wanted Blackwater expelled from the country. They also sought the right to prosecute the men in Iraqi courts.

"The killers must pay for their crime against innocent civilians. Justice must be achieved so that we can have rest from the agony we are living in," said Khalid Ibrahim, a 40-year-old electrician who said his 78-year-old father, Ibrahim Abid, died in the shooting. "We know that the conviction of the people behind the shooting will not bring my father to life, but we will have peace in our minds and hearts."

Blackwater is the largest security contractor in Iraq and provides heavily armed guards for diplomats. Since last year's shooting, the company has been a flash point in the debate over how heavily the US relies on contractors in war zones. The company was not charged.

The prosecution is basing its case on the Military Extraterritorial Jurisdiction Act, which generally has been used for crimes committed by members of the US military. But it is not clear whether the law applies to civilians working for agencies other than the Pentagon.